Transcripts For CSPAN3 Defense Acquisition Management 20171209

Under secretary. And the civilian officials from the army. Air force and navy. They discussed military readiness and modernization efforts. This is about two hours. [ inaudible conversations ] Armed Services Committee Meets today to receive testimony on the Department Reform effort. We welcome our witnesses ellen lord under secretary of defense for technology. Mark es per. Secretary of the army. Heather wilson secretary of the air force. And james gerts assistant secretary of the navy for research and development. Acquisition reform is wup of the most important frustrating topics we address. For years, we have been warned that america is losing its technology advantage. I hope you have seen the work on this topic. That is why the department of defense needs acquisition reform. Not just for efficiency or save money. Simply put, we will not be able to address threats facing this nation with the system of organized irresponsibility that the defense acquisition enterprise has become. I want the witnesses to Pay Attention here. Okay . Were still dealing with a trillion dollar f 35 program that continues to operate in dysfunction. The air force still sub dizs for space launch with cost plus fixed fee contracts. The army sunk nearly 6. 5 billion into nt. Net work that doesnt work. In the navy lcs program is delayed. The cost are now 6 billion and rising. And many of the key capabilities remain unproven. Thats why the committee enacted the most sweeping reform in a generation through the last two National Defense authorizization act. And yet despite that legislation, and in the face of our eroding military advantage, the department has been unable or unwilling to change. While the Previous Administration offered rhetoric about reform, this committee was disappointed we saw no meaningful action. I remain deeply concerned about the state of our acquisition system. Im encouraged by the signs from your team. It appears you are beginning to make progress. Let me remind you of the expectation. First the office of the secretary defense needs to let the Services Manage their programs. Congress has returned significant authority to the service. But rewill be watching closely to make sure that you do business differently. And use that authority wisely. Second. We have empowered the services that doesnt mean you can go do whatever you like. The Services Must led osd set strategy and policy and do real over sight. That means being transparent. Providing data to and following the guidelines set. Again we will be watching. This Committee Takes its own over sight role seriously and we will rely on you to keep us informed so we can do our job. Third, a system must move faster. Time is of the essence. A work of groups like diux the strategic capable office and the Rapid Capability Offices should become standard practice. Not work around to the regular system. And we need the innovations for major defense acquisition programs. Not just science and technology effort. Fourths, you need to be willing to take more risk. And be willing to fail when you try new things. We recognize that congress can make that difficult. Keep us informed of your plans so that we can Work Together. So that were not surprised when things dont go exactly as planned. We would rather have a small failure that teaches us something early in the process, and deal with a multibillion Dollar Program that becomes quote too big to fail. Fifth. Invest in the acquisition work force and empower them to succeed. Too often we hear personnel are unfamiliar with or nervous about new authority. And finally reform your organizations and Business Practices to simplify and move faster. Major changes we have instituted through legislation are intended to give you the opportunity to make more detailed changes in your organization. This is an opportunity to update your organizational structure. And internal processes accordingly. And along the lines, i dont if you fail, i would much rather you try and fail than do nothing. Okay . And if you keep in contact with us and tell us what youre trying to do and what youre doing, we will be patient for about five minutes. And finally, finally, reform your organizations and businesses practices to simplify and move faster. The major changes we have instituted through legislation are attended to give you the opportunity to make more detailed changes in your organization. This is an opportunity to fail. This is an opportunity to update your organizational structures and internal processes accordingly. Now you have reforms and you want to try them. Come and see us. Come and talk to us. Well be glad to cooperate with you. And dont be afraid to fail. Because the only way that we will succeed is to take the risk of failure. Congress provided you with all the tools you require. We expect you as part of a new administration to use the tools. Unlike your predecessor. As you do so, you will have a willing partner this this committee. Do not hesitate to pick up the phone or come over and see any member of the committee. We have given our subcommittee chairs a great deal of latitude and a great deal of authority. As we go through the Decision Making process. Do not hesitate to call any of them with the exception of senator reed. Thats right. Finally, i believe and ill be glad we will be glad to hear your requirements and how we can help you do your business better and in a more efficient fashion. We expect you as part of the new administration as i said youll have a willing partner in this committee. We had a hearing not hearing we had a briefing from the ran study that i think my friend jack reed would agree. Is one of the more disturbing briefings that we have had in the years that i have been a member of the committee. The gap is closing. Theres no doubt about it. So well be expecting a lot of you. But were not going to succeed unless we have a partnership here. Okay . Thank you. Thank you, mr. Chairman. Thank you for holding this very important hearing. I want to thank the witnesses also for appearing here today. We look forward to your testimony of the we have a shared goal to ensure the military forces are equipped with the best systems and technology that the department of defense builds and buys and those systems are the most effective and efficient ways possible to protect the nation and protect particularly the men and women in the armed forces. We have a shared goal that the pent fwon should be able to access the innovative people in technologying available from Small Companies to labs and universities. We owe it to ensure we are buying things at reasonable prices and within reasonable budget. This hearing will give us a chance to learn how the department is working to make the shared goals a reality. The zfss should play an Important Role in the research and acquisition programs that on the chairman leadership. Congress is strengthened the service ts role in the plans, rishlt and Program Review process. That strongly shape whether the program succeed or fail. These new responsibilities are in addition to the role the services have always played. In development of the plans and budgets. Ensuring programs are appropriately prioritized and funded. Especially in difficult budget environments. The Services Play part in nurturing the careers of the military and civilian personnel who work in the fields to often we forget about those individuals and the necessity to main ta and enhance and prolong their careers within the department of defense. Building on the success of the weapons system reform act and the pentagon initiative and making use particularly of the new reforms. In the recent national acts led by chairman mccain. We are seeing some improvements. And are well positioned to make more kbruchlts. Improvements. We must do much better. I welcome a discussion of further change that can be made to strengthen the role as appropriate. With the hope of continuing to improve out comes and provide the best value and the best military in the nation. I would like to say how much i appreciate the partnership that i have with senator reed despite his educational lacking. But we are partners and the fact that the defense bill was passed through this Committee Without a single dissenting vote is ample testimony to the by partisan ship. That characterizes our conduct of the committee and im very proud to have senator reed as a partner. So, well begin with the honorable ellen lord. Under secretary of defense for Acquisition Technology and logistics. Secretary lord. Chairman mckpan, Ranking Member reed. Could i just mention one thing. We may have depending on what happens here, theres a going to be an event at 11 45 of the floor of the senate. We may have to recess until that event is complete. Go ahead, please. Thaurng. Thank you for the opportunity to testify. On defense acquisition and Reform Efforts. Im pleased to be joined by secretary es per. Secretary wilson and assistant secretary gerts. After having spent 33 years in industry, i have come to my current position during a unique period in time. One which provides a great opportunity to make a positive change. First the National Defense authorizization act for fiscal year 2016 and 17. Have provided the direction and the tools for the department to advance the capability required to restore our over match. Speed the rate at which we field the advance capabilities and improve the over all affordability of our fighting forces weapon system. Secondly secretary mattis placed a priority on implementing the provisions alongside other Department Wide reforms. And practices required to improve the readiness of the military. Using an industry anology i believe that the osd should function as a corporate office. Very lean and enabling the services as businesses to execute programs theyre responsible for. Atnl should be pushing the majority of the departments work. Back to the services chlts and focus on prototyping and experimentation. Develops ak techture and standard. Interpreting law into policy and procedure. And simplify acquisition processes to quickly and Cost Effectively provide material and services to the war fighter. Stating it plainly, atnl needs to be the stra teet jij body. With focus across the board driving affordability and accountability. Reducing time lines. And equipping the services to execute their program. Given the fact that the dod average awards daily 1,800 contracts. And 36,000 delivery and task order. Every process improvement we make has the potential to produce significant results. Having reviewed data measuring the typical lead time following validation of a war fighter requirement until the award of the resulting major weapons system contract. I have concluded that we have the ability to reduce the procurement lead time by as much as 50 . Some of the ways in which we plan to do this are incent vising contractors to submit responsive proposals and 60 days or less. And implementing electronic Department Wide acquisition streamlining tools. Further more Congress Gave us the ability to conduct ten pilot programs. Permitting the reduction of cost and placing data for Foreign Military sales. Key to our success would be to have the same flexibility for our u. S. Procurement. If we were granted the Statutory Authority on sole source procurement it would allow to use our judgment to reduce the cost and pricing data we would require when we have cost transparency with the company. With which we do business. In my testimony, i stated we have initiated six pilot programs that push limits of our contracting agility. This is an in order to demonstrate our ability to responsibly reduce this procurement lead time. Tell us couple of the programs. C 130 j. And the japanese global hawk. So one u. S. One Foreign Military sale. Our goal is to get these pilot procurements done within 210 days from the issue of the request for proposal. 210 days . 210 days is the interim goal. We would like empbtly to get to 180 days. We have the process to work down. Well work with you and your team to demonstrate how we do it. Well come back to you as we need additional authority. If needed. But we believe its really interpreting the authorities we have now making sure you agree with them. And having us move forward. Were also prepositioning production contracts to include options nor yet to be developed fms requirements. In other words in the initial contracts we have the language so we can almost fill in the blank for sales. Again, prethinking this is going to reduce the time line and allow us to be very responsive to international customers. You dont need 100 page rfp for a pistol . Correct. On the joint fighter program. We are determined to produce the cost of production and sustainment. We have initiated an extensive jsf cost deep dive led jointly by my office. And the purpose of the cost review is understand in detail at lock heed martin. Rolls royce. And bae. As well as the primary subcontractors and there are a hundred of them in total. What jsf costs. Why it costs what it costs. And most importantly, what we can do to improve cost performance at the prime contractor. And up and down the supply chain. This will be a completely transparent process with the companies involved. The knowledge gained will inform our product contract negotiations. And all of our sustainment efforts. On a go forward basis. And will promote more effective and timely contract negotiations. Just yesterday, the fy 2017 defense acquisition work force Award Ceremony was held. Deputy secretary shanahan and i recognize the out standing accomplishments of 27 top dod acquisition professionals. Out of a work force of 165,000. A few of their accomplishments include implementing a cunning edge approach to cybersecurity. At the timesing for aircraft weapon systems. Accelerating the testing for defensive systems. On ac 130 j aircraft. By two years. Getting 3,000 Tactical Combat care units to medics and special forces operators. Improving cybersecurity for medical facilities. And reducing buy logical agent decontamination time by 50 . To accelerate the return of equipment back to the fight. Out of the 17 individual awards, across requirements and acquisition critical if you thinks the United States special Operation Command received four. Our challenge is to take these pilots, these silos of excellence and scale them to the big army. The big navy the big air force. Were also. How many f 18s are operational and ready fo fly . Not enough. Ill defer to my colleague. On that one. Okay. The numbers i recall are 60 . Are not flying. Operational availability across our air asset is an issue. As i talk to each Service Secretary its very clear. Theres a lot we can do at the beginning of the programs. To design in the sustainment portion. And were foxing on that. Well come back and tell you. Let us know who is responsible. Absolutely. I would look forward to a small discussion in your office. And we can talk about the actions were already taking in terms of accountability. With individuals. Thank you. Were also working to make use of the new rapid hiring flexibility provided by the committee to bring in world class talent in areas like robotic. Laser. Artificial intelligence. As well as new contracting specialist and test engineers. For example, in 2016 our labs hired nearly 2,000 new scientists and engineers. Using the hiring Authority Congress provided. Reforming and improving the defense acquisition system to create an agile enterprise is a continuing process. Requiring Close Partnership across the department and with congress. You have my total commitment to the success of that partnership. Im looking forward to working closely with the committee. And the professional staffers to further implement the initiatives we have already begun. Thank you for your support and the significant effort. And i look forward to answering your questions. Thank you. Chairman mccain, Ranking Member reed. Good morning. When i a peered in midnovember i stated that had modernization was a top priority. Of mine. And ensuring the future readiness of the force in a high end fight would be difficult without fundamental reform of the current system. In my few weeks as Army Secretary i am more convinced this is true. And aware of the urgency for us to modernize. Im encouraged by the progress the army has made consistent with congressional drekt direction to begin over hauling the current system. To be sure a long road lies ahead. Army leadership with the support and advice of congress is fully committed to bold reform that promises to provide american soldiers with the weapons and tools they need to fight and win the nations wars. This committee is well aware of the growing challenges the military faces. Arntd the world. Rising near competitors threaten and sometimes challenge americas interest with capabilities that often match and in the few cases exceed our own. In short the failure to modernize as quickly as possible will increase risk to the force. This makes reform of the Industrial Age system a strategic impairtive. Together with leaders from the regular army. Army National Guard and army reserve im approaching this endeavor through the priorities i out lined previously. First taking care of the people. Our soldiers and their families. Next, readiness. Ensure the army ability to deploy, fight and win. Especially the high end. Third, modernization. Build greater capability and capacity. Finally reform. Improve to free up resources. Time money and manpower. To make the total army more lethal. Capable and efficient. Given the priorities the army is under taking five acquisition Reform Efforts designed to promote unity of effort. Unity of command. Efficiency. Cost effectiveness and leader accountability. First, a three star Level Task Force is mapping out a new command. Army future command that will consolidate the Service Enterprise under one roof. Second, the army is executing eight directives intended to improve our capability and Material Development process by refining how we generate requirements. Simplifying our contracting and sustainment processes and evaluating our progress through mett metrics. These directives leverage authorities contained in the fy 16 and 17. Third. The army has stood up eight cross function that will teams to efficiently identify and manage investments across the army six modernization priorities. These cross functional teams are charged with using demonstrations to inform Prototype Development and reduce the requirement process. Mindful of past failure the fourth effort is ensure Technology Solutions are mature before we begin a program of record. This includes a threat based strategy that 80 of the army science and Technology Funding request against the six priorities. Fifth, we are directly engaging army seen yore leadership as decision makers. As directed. Through a reinvigorated Army Requirement over sight counsel process. Under lying these efforts are the other benefits the army derived from the recent. For example streamline requirements and processes are being captured in the rewritten Army Regulation 70 1. Theres more than we can and must do. To be effective we must have predictable stable and Adequate Funding to restore balance and reduce risk. We are accountable to congress and the American People. We will continue to work with you and your staff on the task before us. I full lu plooy believe you wil progress in the mornts. Unity of effort and unity of the command. Efficiency and accountabilitiment the ultimate test is on the future battlefield. Mr. Chairman i cannot help but be reminded today is the anniversary of december 7. When we were caught off guard in pearl harbor. And the few short years we reenergyized the country the industry the American People to fight and win the war. We need to take the same sense of urgency today as we did in the 1940s. We understand the stakes. We made progress and will not fail. Thank you secretary. Thank you for the opportunity to appear before you today. To discuss acquisition Reform Efforts. Recommendations for further reform and request for Congress Congressional support to improve acquisition out comes. The department of the navy em brised the recent reform on multiple fronts. Were pursuing initiatives to capitalize on the authority provided in fiscal year 2016. We can continue to leverage available tools that drive down procurement costs and assist the work fos. We made meaningful progress today and will continue to be efficient and effective managers of the reform effort in the resources. Our work force in particular is made progress advancing the professional and technical talent thanks to your support. Further meaningful reform must be assisted by sufficient and predictable funding. Timely budget to increase funding levels would reduce market uncertainty. And improve our ability to maintain schedule and cross to cross all the department programs. Sufficient and predictable funding translates into more capability delivered more efficiently which reduces cycle time and cost the goals we all share here together. We appreciate the support of the committee providing the goi dance on policy and reform. Thaupg for your opportunity to speak before you today. I look forward to your questions. Thank you. Secretary wilson, welcome. Id like to put my full statement in the record. And summarize a few key points. Without objection. I want to thank the committee for the authorities that you have given to the services to continue to accelerate procurement and streamline getting capability to the warfare. The air force manages 470 acquisitions programs. Of records. Its about 150 billion. If you add up the what we were authorized to spend over a five year period. There are a few things in the legislation that you have given us that i want to update you on. The first has to do with delegation of authority. Back to the services. Which was very clear guidance in the fiscal year 16. Before that act came into being, 19 of 49 of the Largest Air Force programs were managed in Decision Authority kept at the office of the secretary of defense lefl level. 39 of the programs did we have a decisional authority on skbl you see it as an improvement . Well. Today i have 76 of those programs. And hast week the under secretary delegated eight more programs to the air force to manage. One was the follow on. Last thursday secretary lord gay us authority to move out on that program. In the last week we have moved forward in a approved a strategy and put out the request for proposal. Just in that one action chlts we have saved 3 months on the time line to acquire that system. So were taking advantage of those authorities. Were also doing the same in the service. By pushing authority down to Program Managers to the colonels who can run the programs and we havent been changing things above them in the past. They know what theyre doing lets support them and get after the program. The second major change in the defense authorizization act was prototyping and experimentation. We have been beginning to take advantage of the new authorities in a couple of ways. The most publicly discussed one is the Light Attack Aircraft. You mention the 100 pak request for proposal for a 9 millimeter pistol. It was more than that. It looked like a big stack. This is the letter of invitation and four page set of requirements. And on the Light Attack Aircraft. It was sent out on the eighth of march. In less than five months we have had four aircraft on the ramp to test. And last night i just got the test report. So in less than eleven months with five pages we have tested four aircraft for a potential Light Attack Aircraft for the United States. What conclusion have you reached . Senator, i was busy preparing frg this hearing and didnt read the report last night. But its not just the loigt attack aircraft. That were experimenting with. Another very promising one is something we call an adaptive engine. Intended to get an increase in thrust of 10 with a 25 increase in fuel. Fuel efficiency. And we have two contractors work lg on that. Its not a program of record its an experiment. Were trying to mature the technology. Refine the requirements, reduce the time line, to get better engines that is are more fuel efficient to the war fighter faster. So those prototyping a rapid fielding kinds of authorities are i think going to pay us big dividends in the short term and long term. The third thing that your authorities gave us was something called the other Transaction Authority. Were taking advantage of that in a number of our Different Program areas. Really targets the nontraditional dod contractors the Small Innovative Companies that wont do business with the department of defense under normal circumstances. Because were too hard to work with an example space and Mission Systems let a 100 Million Contract to give us space, ground, communication capability and for a particularly for our space forces. And that consortium is managing things for us under contract took us three months to put that together. Roam labs is another one. That you authorize to put together a consortium of Companies Helping us on Cyber Intelligence surveillance. The fourth area that i want to highlight for you has to do with people. And the emphasis on this committee on both expe doited hiring and the professionalization of the work force. In fiscal year 16 we hired 810 people. In fiscal year 17 we almost doubled that. Up to 1,600. Direct hiring were seeing more effort by the air force to take advantage of the authorities that you have given us. In fiscal year 16 we only hired two people under those direct hirings authorities. In fiscal year 17 its 266. Thank you also for the defense acquisition Work Force Development fund. Were using those funds to enable and empower and educate, train exceptional officials to be able to take advantage of the authorities that you have given them to do things differently, faster and bringing more capability. Theres much more work to be done. But were beginning to make progress. There are areas where were not very good at buying stuff. Software is one real example. An area of kopted focus and extra emp sis by the air force. Not all of this will work. Thats why we call them experiments. If we have productive failures and fail fast, and learn for it. And continue on in different vectors of technology. We have a chance of better meeting the adversary in 230. And thats what this is all about. Thank you. Thank you, madame secretary. I thank the witnesses. Id like to point out it was about three years ago that we were having a hearing with the service chief and we were looking at the fact that the u. S. Gerald are ford had a 2 billion cost to over run. And i asked the secretary of the navy no the chief of the naval oempgss. Who was responsible for a 2 billion cost over run . You know what the answer was . He didnt know. He didnt know. I mean, is such a thing as accountability. And all of the things that was just covered by the witnesses here. Theres no penalty for failure. Can you tell me one or two individuals that because of the failure for for example 6 billion future combat systems that never worked can you tell me an individual or individuals that were paid a penalty for that failure . Yes. I would be more than happy to have a meeting in your office and talk about some actions we have taken over the past several months to get at that very issue. What can you tell us can you reveal us i. We as a team are working closely together to look at functions and individuals in osd. And in the services that duties theyre required to perform. And a determining whether or not we have the right people in the right slots and i dont want to talk about individuals here. In a broad forum. We appreciate the opportunity to do that behind closed doors with smaller group. Well i thank you, but when i go to a town hall meeting and tell my citizens that we blew 6 billion and theres not been anyone fired or replaced or new way of doing things, theyre not really very happy. So, well be glad to hear what you have done and what you plan on doing. But theres no reason why you shouldnt tell the American People thats why we have hearings in the Armed Services committee. Okay . So the next time that you come before this committee and you will, i want to know what you have done. Besides say we dont know whos responsible. Okay . Sir, excuse me. I want to be on record we hold people responsible. And we will talk about that. All right. You hold people responsible. Thats our system of government. Who is it thats been fired . Any answer . No. Im not aware of anyone being fired. To your point. We agree. All right. Senator reed. Thank you very much. Following along the lines of accountability. Thats the most critical principle. One of the practical difficulties the programs sometimes stretch over decades. And there are people who change out, retire. Who are promoted. So going down, any thoughts about how we can have this accountability stretch over many years and as a subset of the questions, on the year to year basis what metrics can with e use to make sure were on track and the individuals will be closely associated with accountability . Absolutely. First there is an active discussion going on about when we rotate Program Managers out. It has not always been aligned with critical milestones in the program. And thats somewhat a problem in terms of continuity. We are looking at hold onto Program Managers through key milestones or events. Thats one helpful issue. Secondly, in the department, ill speak for myself here. I know we all talk about this. I on a monthly basis roll out the 87 major defense programs metrics. So in other words we have 87 a cat one programs that are accountable for 96 of our 1. 9 trillion. We rack and stack the programs in terms of their performance. Not only to the contract itself. But to the needs of cocome down range. For instance you can look at precision guided programs, that look green in you will. If you look at the letter of the contract. However we know we have shortages down range. We know we have asking for more. We take that Market Intelligence if you will and factor it in. We look at the metrics. Where are we in term of cost, in term of delivery, in terms of quality. We review that and we roll that up to secretary mattis. Then i spend my time from an osd point of view on those critical joint programs. So right now an enormous amount of my time is focussed on f 35. Those are system of the ways we are Holding People accountable. We have war rooms, its very transparent. You are invited to come see. We have the metrics on the wall. We have in terms of accountability we have the Program Managers names. And they come and report out to us. We flow that information up. So again im taking that lens that i had in industry and every month rolling the numbers up and seeing where we are. Seeing where we are in deliver time and quality. And making sure we have action plans. In the remaining time. A brief comment. First of all i agree with what what he said in regard to aligning Program Manager with the krit al milestone. I also want to address briefly wa you said about the process being so long. So under the cob september were developing with army future command. What we envision is with the unity of effort and command, adopting a process that is enabled by the where we have prototype, test, learn fail prototype test learn fail. We are looking at reducing rirms. The currently runs 5 years 60 months down to 12. If you reduce the time frame you have clearly one person would be in charge of the effort. That gives you one example of how were trying to reduce the time line to ensure accountability. I apologize. My time is limited. Yes, sir. I agree with both secretary and secretary lord. The tenure is key. We have a gate review process where we, myself and the are common on. Were looking a the programs at milestone. And we do annual reviews so thats a key point where we can see the program and sasz the Program Manager or peo to see if theyre delivering. If not hold them accountable at that point. Another key issue secretary wilson mentioned push responsibility down. So its hard to hold somebody accountable when they dont have the authority o make the decision. Pushing that authority down is a key element. And finally probably most importantly is Work Force Training and certification. If we havent done the effort to train them, certify them and make sure theyre capable its hard to hold them accountability. Thats our fault if we havent given them the skills to be successful. Whos fault is it theyre working 100 hour workweeks . Whos responsibility . On board the ship . That would be the cno side of the operational command. When i asked the question they said well do a study on this. Is study as to whether the sailors and marines should be working 100 hour workweeks . We need a study to figure that out . Sir, im not familiar with the details of that plan. If i could take a question for you sdp get back with the exact strategy to get after that question. I know you had previously. Thank you. If you have additional comments. No, sir. My colleagues covered it. Thank you for your service. Thank you, mr. Chairman. Just let me begin secretary wilson. You have mentioned the Light Attack Aircraft and where were moving. I want to compare that with the program which is under development at time. The program as you mention in your prepared statement theres movement in both the be 21 program. A audit from the pentagon praised the b 21 program plan for meeting cost goals. And requirements. I think if this trend continues to be 21 could one day merge as a model program. Congress and the taxpayers might wonder if we could duplicate all or a process that has worked well in the particular program. For subsequent programs. I know the chairman had expressed real reservation as to the approach that had been proposed. And i think hes been very interested in the development and the Movement Forward in terms of gefting this done on time. And on contract. Do you see similarities between that and the Light Attack Aircraft possibilities and can we use the process that we have so far been successful in developing in the b 21 plan. Is that something that can migrate to other plans . Senator were actually using different authorities there. We have use other Transaction Authority are simple authority for the experimentation for light attack. B 21 is more traditional. The thing that dimpt its being done by something we call the Rapid Capability Office. Which has a board of directors of senior people including myself. The acquisition authority. And things move quickly. We are actually extending that down and using that charter for the Rapid Capability Office to extend that construct to our other procurements. Well give this a try. Its a charter for kind of a rapid capability process. Where Senior Leaders will allow a Program Manager to identify a program they want we want to move quickly on. Set parameters. And instead of having to walk it around the pentagon to get 20 signatures. They come to a meeting. Make a presentation. And we move. We are modelling that in our in the air force. Thank you. Secretary lord, there was a discussion i had with my staff in terms of time frame it takes to get new data or new information new plans put together. And they used an example we were talking about it. Cell phone. Straightforward off the shelf. I can buy it make a decision on it, put it to use in about a week at the most from the time i get it until the time i can use it. Acquisition time for a new piece of software and hardware combination today through the pentagon could take as much as two and a half years. To acquire. This is basically out of date. After a year or two a year and a half. My question to you, when youre all said and done using of hard combination available today in the general public for perhaps purchased within a one week or twoweek period of time, whats your goal for getting the acquisition process down from a 2 1 2year time period for Pentagon Acquisition and issue . Our goal is to look at where weve had successes with diux, with sko. Ive asked will rope tore r to e with here today because the Rapid Capabilities office have done. And, frankly, as we organize atnl into ans and rne, what were basically doing is trying to scale the behaviors, the processes or the lack thereof that weve seen in these different groups. And its an issue of scale im going to run out of time. Let me just ask one more time, whats the goal in terms of is there a goal for cutting back acquisition times . 12 months for major programs. Two 2 1 2 years to 12 months . Correct. Thats the first step. Id like to be on record saying. Okay. Next of all, Cloud Computing is here to stay. Clearly the pentagon has got to be able to make decisions about how they acquire capabilities. You currently chair the Cloud Executive Steering Group board or the cesg. Does the membership include war fighter representation from military services combat and kbands kba commands to include Cyber Command . If not, why not . We have pulled in all the services and were talking to them. We have put out an rfi and have gotten 52 responses. Were working right now how were going to go about that contract. We dont know how were going to structure it yet, but absolutely, because what were looking at is mission focus here not backroom Business Systems and its all about getting that computing capability out to the edge. We want our war fighting systems to be able to do machine learning, to have artificial intelligence, and until we have all of our data in just a few places, its going to be very hard to do that. So, frankly, sir, everything i do is about lethality and the war fighter. Thank you. Thank you, mr. Chairman. Thank you, mr. Chairman, and thank you all for being here today. The defense federal Acquisition Regulation supplement, as i know all of you know requires all d. O. D. Contractors, including Small Businesses comply with a complex series of Cyber Security requirements by december 31st of this year. Now i certainly think its very important for us to address the Cyber Concerns and have been banging the drum on that, particularly with respect to software, but i am concerned as a member of the Small Business committee in the senate as someone who comes from a Small Business state that our Small Businesses are very important to technological innovation and i have heard from many of them that theyre very concerned they cant comply by this deadline. Unlike some of the bigger businesses that work with the department of defense, they dont have the support to comply with these complex regulations by this deadline. You can tell me how concerned any of you are about this and whether there are ways in which we can do more to help Small Businesses comply . I am very, very interested in this topic, and, in fact, we are concerned about being kpliecomp and worrying about risks. We heard back over a year ago that there was great concern about the difficulty of implementing these requirements, so we went and modified them and in order to most effectively and efficiently get out to the whole community, especially the Small Business community, we used a forum where i have set up where quarterly i meet with all of the different components with three Industry Associations, aia, ndia and psc. They all have Small Business components. The professional Services Council especially. In our early october meeting, we talked about this very issue because it was brought up. And we said that clearly the only requirement for this year is to lay out what your plan is, and that can be a very simple plan, and we can help you with that plan. We can give you a template for that plan. And then just report your compliance to it. So we are trying to reach out very hard through the Industry Associations to get this word out. I think there are maybe some old information out there and any Small Company that has any issue can come to us and we will help them with that. Thats really helpful. Are there guidelines we are share with the Business Community in our states to let them know . Absolutely. I will get that to your office. Absolutely. That would be very much appreciated. Secretary goertz, the virginia class submarine is one of more successful acquisition programs. Its delivered on schedule and on budget. Can you talk about what happened in that Program Early on that has allowed it to be so successful and whether there are lessons that we can transfer as were looking at the columbia class subs to ensure that they also can deliver on time and on budget . Yes, senator. Im third day on the job so i was not around that program as it originated in person. You should know the answer to this, come on. Yes, maam. I would say looking back on it, though, designing for affordability and holding a stable design were key straits. Heading the right government and Industry Team working together through all of it. You know, as secretary spencer likes to say, shared risk, shared benefit. A very good working relationship between the government and Industry Team. As we look at columbia, were taking that philosophy and taking it to the next level. Quite frankly, using any of the kmorn equipment common equipment we can across the submarine fleets so we dont have to reinvent equipment and focussing really early on the design for affordability. Secretary lord and i had a review yesterday i think it was. Im very impressed with their thought process and discipline process of really looking at cost in the design phase, not trying to make it more affordable after its designed. Think those are great principles that well look to continue across the other parts of the department and the navy. I appreciate that. I hope you will take the lessons that are learned and make sure theyre incorporated into columbia. Absolutely. To come back to Small Businesses, as i said and i know you all know this, that a lot of the technological innovation that we are now adopting in our military come from Small Businesses. The sbir program, the sttr program have really been successful for sbir, for every dollar spent through the air force, 12 was returned. In the navy, for every dollar, 19 was returned. These are programs that really work. Can you elaborate on what more we can do to encourage the use of Small Business in these programs . I was just speaking with raj shaw at diux a couple of days ago about how we can take the success theyve had at diux because theyve let over 60 contracts using their other transaction authorities to work with Small Businesses who might not have worked with the department of defense otherwise. I asked him that exact same question and he told me that there are some constraints on some of the sbir money that doesnt allow it to flow. I dont have the specifics here but id love to come back to you. This answers the question of what else can this committee do to help move along towards incorporating commercial technology and so forth. I think this is one of the few cases ive seen so far where another authority or taking away some kind of legislation right now might help us, but id love to come back and give you specific examples. That would be tell us what you need. I will. Yes. And also, if the Small Business Committee Also needs to do anything, please we can move on that as well. Very, very timely. I appreciate it. And senator, i would add to your point, Small Business tends to be an engine of innovation. Thats something we have to preserve. The army works to meet and exceed its annual goals for business, and we do. I think the key thing is we talked about the complexity of regulations, something were working hard to deregulate, to delayer. Id say security clearances are a big challenge for businesses. Absolutely. Over a yearlong process. And the complexity the other thing i mentioned, this is preaching to the choir, clearly with c. R. S and, you know, the uneven funding, if youre a small mom and pop shop out there and im referring to my industry experience, its hard for them to survive in the uncertain budgetary environment. We risk losing those folks who decide to get out of the defense business and go elsewhere. Thats a big threat to our supply chains. How would you characterize your relationship with Silicon Valley . Senator, i think from the army perspective, its a growing one. I think its something we need to develop, particularly when we talk about i. T. Systems, as senator browns pointed out, its a very particular challenge given the fact that the Technology Changes so quickly and now the innovation is happening mostly if not entirely in the commercial sector. Its a relationship we have to continue to build with Silicon Valley and broadly with the commercial sector. And tap more make d. O. D. Acquisition more friendly to the commercial sector. The link between the cia and d. O. D. [ inaudible ] your go ahead. I agree with that. Cia has done some great work, for instance, migrating to the cloud. To answer your question from my perspective, im leveraging the Defense Innovation board pretty significantly. And thats how im tying into Silicon Valley. Ive worked on the subject of software where i think the most opportunity lies for the department both from a contractor point of view as well as developing commercial techniques. So i speak routinely with the Defense Innovation board about how to do things differently, and particularly eric schmitt i speak with. I was just on the phone with him monday afternoon asking him what can i do differently to solve some specific issues. And thats helpful. We also are using our diux arm out there to set up roundtables for me to meet with a variety of Software Companies because thats where im focused right now. How long has diux been in business . For two or three years, perhaps. Im going to have to get back to you on the specifics on that. Im not smart enough to know that right now. Thats not a lot of progress. I want to build on it. Senator ernest . Thank you, mr. Chair. Thanks to all of you for joining us today. We had a great forum this last weekend, the reagan National Defense forum, and secretary lord, im glad you were there. Secretary esper and i set together on a wonderful, wonderful panel. I think everybody was engaged at one point or another through those discussions. And it was very helpful to see so many people that agreed on some of the challenges that we have, including the c. R. S, as was just mentioned, sequester, our Budgeting Issues here in congress. And secretary lord, from this past weekend you had mentioned the need to redirect our investments. To meet the demands of a shifting world. And i agree with that as well. And we do need to invest in innovation to keep our Competitive Edge over near peer adversaries like china and russia, and thats a topic that secretary esper and i were engaged in on our panel. Can you talk about some of the emerging capabilities the department of defense should be investing in to ensure that we are keeping that technological edge . And how do we balance those investments then with the need that we have to improve our readiness . What were trying to do is strike that balance. We were talking about operational availability of aircraft earlier. We obviously need the readiness. What we are doing is trying to take a very federated system of labs between the services, ffrdcs and so forth and align them in terms of modernization. What do i mean by that . Instead of working on maybe hundreds of projects, were trying to identify specific Technology Domains that we agree across the department are critical to really reach the overmatch capability we want to have. So specifically what does that mean . Hardened microelectronics, absolutely. Hypersonics. Then the whole cyber area and everybody defines cyber a little bit differently, but im talking about offensive and defensive cyber. Those are three areas where we are committed and were looking at aligning our investments to make sure we make a step function change in our capability. Okay. I appreciate that. Is there a strategy for cyber . What were doing right now is working on the elements of that and woed love to come back and talk to you about that in more depth. As you know, weve just stood up Cyber Command and we have a whole series of efforts. Yes. Id be very interested. An issue without a strategy for the last nine years that i know of. Understood. Yes, the chairman and senator rounds have been very passionate about making sure we are nesting or capabilities together and understand who is responsible in what domain. So very, very important. And secretary lord, as well, ive heard just recent reports that this distributed Common Grounds system or dsig soft, the software that aggregates Intelligence Data for our special operators is problematic, its ineffective is what ive heard from some of those operators, and i also understand there are a number of special solutions that may be better and immediately available. And in some cases theyre already in use. At what point does the department then decide to simply cut its losses and move away from a program that they feel is ineffective . I dont want to comment too specifically about those because whynn i was at tech strong, we did have one of those contracts. I will vector over to an air force program to answer the same type of question. We feel strongly when the environmental conditions and our adversaries have changed rapidly and we no longer believe that programs that were pursuing can achieve the lethality that we wish, then well talk about potentially terminating programs. And, in fact, general holmes and i were just here talking to hackd last week about jstars recap. Thats a perfect example of where given the tested environments in which were fighting, were thinking that perhaps there might be better ways to get sensors to work closer to the adversary. So thats an example of where we came up and said were strongly considering and want you to understand this is our thought process. We want you to be thought partners with us. And these are all the reasons it was a secret hearing. So i cant get into too many details. But thats an example of where were looking at the current state of events, our current capability, a Current Program and what we now know about other ways to achieve the end object ifrs ives we were trying to address. Okay. So multiple factors involved in that decisionmaking process, dollars, capabilities, overmatch and support. Absolutely. And its one thats not taken lightly and all of the different equities within the building are considered before we come and take the time of congress to say this is a serious concern of ours. Okay. Thank you very much. [ inaudible question ] several years. Several years . For the recap. Thank you, mr. Chair. Have you got a handle on how much weve spent . I dont have it here today, but i certainly could get that. Yes, we do know. Is it in the billions . On the recap, i dont believe its in the billions, but i shouldnt speak out the data in front of me. We will get back to you. Senator warren . Thank you, mr. Chairman, and thank you to our witnesses for being here today on this important topic. Ive previously asked each one of you if you would make research a priority in your work. You have all said yes. So im going to start with a really simple question. Are you still committed to prioritizing basic and applied research . And will this commitment be reflected in if the fy 19 budget . I am willing to take really short answers like yes. Secretary lord . Yes. Secretary esper . Yes, senator. Yes, senator. Yes. Good. Good. So i have another question. In an effort to emphasize the importance of r d and in recognition of the span of responsibilities at atnl that they were so big that last year this committee directed that the position that ms. Lord now holds be split into two separate positions, one that focused on research and engineering and the other that focused on acquisition and attainment. And i know youre all working hard to try to implement that. I think having a Senior Leader focused on future technology is incredible and important. I support that. But one of the real problems in our system now is that we struggle to convert promising new technologies in the lab into the field. And the gap from the lab to the field is sometimes known as the valley of death. I am worried that splitting oversight of r d from acquisition is going to make this problem even worse. So let me start with you, ms. Lord. After the split, how will the department ensure that our research and Development Program stay it is closely linked with the departments acquisition requirements and that promising technologies are actually nurtured and incorporated into our programs of record . This is something were working on right now, and, in fact, ive had conversations that im meeting with staffers next week to go over what our preliminarily plans look like to have them be thought partners with us. Quite simply, what were trying to do is push the risk into the research and engineering side with a lot of promote typing and experimentation so that there are many, many iterations in order to understand the capabilities of new systems and the cost of new systems before pushing them over to the ans side. Youre saying getting it further along while its still in the research bucket . Thats one piece of it. A second piece of it is we are working on streamlined acquisition processes where you basically have a flowchart and you use the simplest methodology possible to get things on contract so that were not held up in this do loop of you want to do something but you cant get it on contract. And these other transaction authorities are particularly germane here because theyve helped us. Thirdly, were going to have some common resources between r e and a s so its not as if we have people that are 100 r e or 100 a s. We will have a lot of those, but we are going to have some shared resources that span that gap that allow one group to understand what the other group is doing. This cant be personality dependent. It needs to be sustainable as we all move on. So were going to actually be, you know, promote typing and experimenting over two years to make sure we get that right. The construct i have right now, and ill be coming back to brief all of you on this, is we are going to do a twoyear, eightquarter transition and we have a model for what were going to do and were going to tell everyone what that is. Well begin moving towards that model, but were not being rigged about it. Were experimenting and making sure it works. Were making sure weve got a lot of brains around the table to talk about all the what ifs. I appreciate it. We dont want to lose at that space. Secretary esper, would you like to add on that . Yes, senator. I would say briefly that the army has begun a process of realigning its s t investments, for s. O. For 19 to 23 weve realigned 1. 13 billion towards s t along our prosecutors and the way were also doing that as the cross functional tomorrows are stood up and theyre responsible for their specific capability areas, with s t now aligned to that specific capability area, were issued a directive that would require standardized written agreements about what is expected to be delivered from the s t to hand off to the actual cft leader. Were trying to do what you were saying. Im out of time. Im going to ask the other two of you to answer this in writing. Weve got to get better at this. Anything that has a name the valley of death is not good in terms of acquisition, of new cutting edge technology. We can do all the terrific research in the world, but if we cant translate that into something that helps our war fighters, we have failed at our except for the clemson football stadium. Thats known as the valley of death. Not to me. All right. Thank you. Thank you, mr. Chair. Let us bring it back to this topic here. First of all, thank you. Im so encouraged to hear the conversation today. I heard the worse crisis mentioned twice. Ive heard sense of urgency mentioned several times. As the next business guy in seeing this crisis i am terribly encouraged by what yall are doing. Ive met you and had private conversation. Secretary wilson yesterday was so grasht with her time talking about a Major Air Force base and a major piece of technology. I want to talk about something a little different secretary esper, you mentioned first in your opening comment in 1941. And we built up not in years, in monthlies, literally, things coming off the production lines in months because we broke through everything because we d considered it a crisis. In 1949 just three years after we demilitarized after world war ii, we were right back in the same position. That war was a little bit different and it was over. I dont have time describing the crisis, but after 30 years of disinvestment and only one major recap and after 16 years of active combat, i believe weve got a crisis. The Global Situation is more dangerous than its ever been. Weve got a debt crisis here. Weve got a near rival that is now going to be a full rival thats actually spending more money than we are in real terms adjusting for purchasing power. General mattis says that there are three phases to solve this problem. And youve each spoken about it in different ways. There is a threeyear term of readiness. Weve got to get readiness recovered. There is a 15 to 25year plan for new technology and recap and the full bloom of u. S. Innovation and technology with regard to providing for national security. At the same time, china is coming online. Its not going to take 15 years before a lot of their new technology is hitting. They have leapfrogged major areas of restriction. They bring product online much cheaper than we do, much quicker and with far less restriction and government intervention. Im worried about the shoulder season between year three and 12. Secretary lori, im concerned about this, how do we find quick, lowcost solutions for the battlefield. Id like the combat and command representative to come in on this as well. Im very concerned weve got our eyes out here, were looking at where the money is needed and yet these highcost solutions, flying f35s into battle space where an a29 might be okay. Those types of examples. Jstars, you mentioned those just a minute ago. A great longterm capability. Weve got a dying platform right now. Technology, the battle spaces are changing. That interim period, thats a perfect example of where i dont personally see the air force or anybody else really moving toward that interim solution in a way that gives me comfort with a lowcost Current Technology platform that is better than what we have and more Cost Effective than what we have and doesnt take money away from longterm development. Would you address that . Twopart answer to the question. One, i would really like to come back in a different setting, in a classified setting. Thats fair. Talk to you about some of the programs going on. I look forward to that. Secondly, what youre talking about is exactly what diux, sko and the Rapid Capabilities office are doing. And we should come back and tell you about some of those successes. What we have to figure out how to do is scale that. And right now we havent scaled it because probably the best meeting i go to in the pentagon is something called the war fighters Senior Integration Group where we sit down every two weeks and we have on vtc, afghanistan every two weeks, and then the other two weeks iraq, and we talk to the war fighter about what is going on today and what they need in terms of Rapid Capabilities. This is what has spun out an enormous amount of counterumas equipment. We do it on a small scale. Whats what this reorg is all about in my mind, getting away from the 5,000 process, other than the very complex areas where we might need some of that. Just use the little bit of process we need to get stuff out the door. So secretary, would you comment on . I would love to hear you respond to all of that, all of you respond to the question after the hearing. Its a great question. Id connect a couple of dots from a historical example. The key here is change in culture. Witnesses will be thank you. Senator, the key is changing culture. At the end of the day, we have to change the culture. Thats what came out of the 2011 decker wagner acquisition report. Thats the most crucial element. Standing up the armys futures command to do just that. Take an approach that says lets not the perfect the enemy the better, lets promote type, demonstrate, learn. Lets fail early and cheaply and go with 80 solution. Get something fielded. The view is if we can stand up the organization quickly, get the unity of effort and unity of command, get some early wins under our belt, we can start changing the cullure so were ready and positioned posture to begin looking simultaneously at the mid and farterm threats you described. And how long have we be fooling around with future combat systems . Well, thank goodness its in our rear view mirror now, mr. Chairman. Senator, in the navy, were taking an approach with an Agile Acquisition office and that whole acquisition process, which i cochaired, there is a board i cochair with the cno, and thats really looking at that sweet spot of something that we know that is out there that we can accelerate up quickly to give us a bridge or there is a problem that we need a solution for. We cant wait for the business as usual. Were seeing about a threeyear acceleration for the products were getting through those programs, unmanned aerial refueler, and some of the highspeed vessels were doing. Thats a good way to give, again, we should have a menu of options. Some needs to be rapid. Exactly what we have today. Get them in the field tonight. Like i used to do at so com. Some need to build a carrier very deliberate. You want to make sure you get it right because it is going to be around for 40 years. Then there is this sweet spot. Some of the committees and the rapid promote typing abbreviated acquisitions gets at that sweet spot. Thats what weve been missing. Youve given the authorities. We have to go implement those. I think were in the emerging stages of that and at the next two or three years thats going to question at the shoulder thing, we cant wait for 15 years for something that is going to happen five years from now. Senator, for the air force, we look five to 15 years. And youre right, the text cal risk in the shoulder season is something all of us are worried about along all of our programs, particularly those that are new ways of doing business. And i know you and i have a scheduled classified session to go through some of those that are a high priority for you. Thank you all. Mr. Chairman, thank you for your courtesy. To the Ranking Member, thank you. I would think it would be very important if we can have this followup meeting in a classified environment at your discretion. Thank you. I think it is something we ought to pursue. We ought to pursue it. Senator donnelley . Thank you, mr. Chairman. Thank you to the witnesses. Secretary wilson, i want to thank you and your staff for a unique level of prompt and Clear Communications since your confi confirmation. Weve been able to Work Together on important issues to improve the readiness of our forces and improve the lives of our airmen and their families. One of the challenges will be the readiness of the a10 fleet for the foreseeable future, im concerned about the shortfall and funding for new wings. More than 100 aircraft still need new wings and the air force will be forced to ground some of these next year because their current wings have reached the end of their service life. I understand the many, many challenges the air force is up against right now, but this obviously has a very real impact. What do you see as the air forces options on this issue, taking into account budgetary challenges, readiness requirements and our timelines . Senator, thank you for the question. The Defense Authorization bill that the Senate Passed and the house passed and the House Appropriations mark add money into the air force budget to retool and open a line for wings. Wasnt in our budget. I know the Senate Appropriation committee is working on that now. If that comes through, we will execute that and get our get that line started back up so that we can rewing. I think the amount would be the first it would be the tooling and the first four or five sets of wings for the a10. Youre right, we are always managing, you know, how do we move to new platforms . At the same time we try to maintain capability and cover missions with existing fantastic platforms. And i happen to be kind of a fan of the a10 myself. Thank you. Secretary lord, i appreciate the hard work you are putting in to getting our acquisition systems running more efficiently. Its really important to get it right, as you well know. Weve discussed hypersonic systems in the past. Oid like to revisit that today. Conversational prompt strike or cps advanced is the most advanced hypersonic development. Testifying to this Committee Earlier this year, general hyten advocated fueling capabilities by the mid2020s. I believe the navy has a vital role to play in that. Is that a probliority for the department . If so, why . Yes, i see it as a priority. In fact, there are two key programs going on within darpa and osd that are moving along. I would be more than happy to come and have the technical lead brief you on those. If you could provide us an update where you are with this effort. Yes. Senator, could i add one thing to that . Surely. Absolutely. On hypersonics, there are two demonstrators where the air force and the navy is working with darpa and at a promote type and experimentation effort that were using the authorities you all gave us for experimentation and testing. So we didnt wait for extensive requirements kinds of things. Were moving forward on an experiment for hypersonics and through the authorities you gave us. Secretary guertz, i want to talk about the role our defense labs play in the acquisition process. Ive been struck by how integrated they are in not only innovating new capabilities to meet requirements but testing and verifying for the navy throughout the private acquisition process. Id love to get your view of defense labs as a vital player in the ak zbis systcquisitions. Yes, senator. In coming to the navy, im impressed with their labs and how well theyre tied. Think having an organic capability, especially as we have this rise or commercial technology and commercial products. That organic capability to take them, test them quickly, perhaps integrate them in a different way than would be done commercially is a critical piece for us. Back from my so com days, all the soft war for our gun ships. Thats all written organically. They gave us great flexibility to change use the requirements on the battlefield changed. Think its an absolutely critical piece and a key in this getting through the valley of death. They can help mature, you know, an immoo tour commercial product from a Small Business, work with them and get it in a fieldable or close to fieldable condition for us to pursuit into the field. Thank you. Thank you, mr. Chairman. Thank you, mr. Clahairman. Mr. Chairman, you know any time we have a committee talking about acquisition, i have to bring up my favorite prop. Almost 700 pages. Ten years to define a handgun. Next generation handgun. And i just found out with the update, good news is weve down selected, weve got a manufacturer, and ten years from now all the army units will actually have this gun. 20 years after it was conceived by the air force. First off, i thank you all for your service. Welcome. [ laughter ] but we know there is no logical basis for Something Like this for something as straightforward as a handgun. A 20year process from concept to full deployment within the army, i dont even know what it means for the whole d. O. D. , but within the army. So, senator mccain in his opening comments said with the exception of senator reed he would like for you to talk with all of us. In all seriousness, as somebody who has worked in procurement and strategic sourcing and acquisition, if i were going into an organization to be retained to fix their acquisition process, id probably be firing quite a few people. Now, we operate a little bit differently here because you have constraints that are placed on you by congress. So we probably need to shine a mirror and fix some of the constraints. Shine light on that. Come to people like me and others who are passionate about this issue so that the chair has empowered the subcommittees to look at this. Get us on a fast track for providing you with relief. And get on a fast track for removing some of the constraints that youve placed on yourself. And i would just like you to respond to that in the remaining time. Senator, if i may, since the handgun was an army system, let me give you some good news. The handgun was actually fielded last week at my old unit, the 101 air force division. That fielding has gun. I would note, senator tom cotton actually qualified on the weapon and was very pleased with it. The troops were very happy with what we fielded. Its important to what youre say, after the years of going through that extended process, the chief of staff of the army, general milly, took to heart what the congress said. Used the legislation that was in the ndaa. We had stood up about 20 months ago or so, the reinvigorated army oversights council. He took that case that youre talking about, found the requirements process and 18 months later we got to the point we were delivering weapons. Weve managed to turn a bad news story into a good news story. I think that type of process, leveraging the authorities we got from congress is the basis to which the army is heading with all the changes we plan to making to improve the acquisition process and make sure we dont see that again. Sir, from the navys perspective, you guys have been very helpful. Weve been doing some piloting of reducing a number of critical performance parameters. You gave us the authority to try one where we only had two critical performance parameters. That simplified the solicitation. Then we could work with industry, again getting to secretary wilson, a much shorter requirement and gave us a much broader look. That saved years from us going through the normal traditional piece. So the authorities you give us, again, help us try and drive that change because ultimately weve got to get the workforce trained and get the culture shifted from what has been to what needs to be. As secretary of States Wilson and lord respond, weve got to keep in mind about the cumulative cost of this. Weve got to take a look at, when you have to participate in a procurement for ten years, how much cost youre building into the Industrial Base that we ultimately pay for. So i also want to make sure that im getting a commitment from you all to come up with specific actions that we need to take to accelerate the process. Secretary wilson and well finish with secretary lord . Senator, i think you were out of the room when i did my Opening Statement and i need to get a red ribbon, but this is the letter of invitation and there is a fourpage document for the light attack experiment. And it it fits nicely in a very slim brief case. You get a blue ribber for thfor ribbon for that one. I will put a blue ribbon on it and provide you a report. We tested four aircraft and the final report arrived with me. Less than 11 months from a letter of invitation to the final report on testing and take a step from there. I have what else can congress do to be helpful. I have suggestions for you and ill provide those in answers to questions. Thank you. We are coming up with methodologies to step through a flowchart to arrive at the simplest and quickest compliant contracting methodology for different procurements. And i think part of the issues with this gun youre referring to and we applied a one size fits all, bring it on mentality. And were trying to learn from our Rapid Capabilities offices, from diux, from sko who have taken the authorities that congress has provided and applied them appropriately to speed things, therefore have them been more Cost Effective and there by allowing Smaller Companies that couldnt afford to go through this multiyear process to participate. What were trying to do is scale all of those activities, but weve got to educate our Acquisition Workforce to be able to do that, and that is a huge issue, so im taking a fundamental relook at how the Defense Acquisition University operates. And were looking at more one, twoday sessions where we teach people skill sets that they use the next day. But weve got to give people the tools and then we have to train them. And i am very optimistic that we can do that. [ inaudible question ] because i think we have a lot of smart people that are looking for leadership and you didnt have smart people before . I dont think the focus was on Cost Effective quick solutions, and i dont think people had the intestinal fortitude to come up here and say what needed to be changed. I think we have an environment now where we have a huge number of people that are all aligned on the same objective and were all very comfortable having a conversation saying, this is working, this perhaps has an unintended consequence and i see a lot of momentum between the building and the hill to Work Together to achieve our shared goals. Well, i certainly hope youre correct. Senator king . Mr. Chairman, if i can add just one quick thing to mr. Tillis question, you asked about things that the congress could do. I would tell you in the case of the handgun, through that 18month process, we had promote typed, tested, demonstrated, used soldiers selected the handgun and we had a protest. To get rid of frivolous protests would be very helpful. All it does is add time, cost and delays giving the soldier what he or she needs to being successful. Senator king . Perhaps the handgun example can remind me of my fathers advice that even the worst person can serve as a bad example. So maybe we can learn from that. First, somebody at the pentagon has a sense of humor to send you here on your third day. It will only get better from here, i can assure you. Mr. Chairman, this is a very important hearing and i want to thank you for calling it. And secondly, to the entire panel, this is one of the better or id say best hearings ive seen on this subject in five years. You are clearly focused on this problem. Secretary wilson, the what you toilld us about the Light Attack Aircraft and the process is incredibly encouraging. And i hope that you will be able to continue along those lines. Secretary lord, freud said anatomy is destiny, napoleon said my contribution to that is structure is policy. And i would like it if you could supply to this committee your organizational chart of the acquisition process. And im interested in seeing how many committees there are, how many approvals, what the levels are because i do think im not being facetious. If you have a cumbersome structure, youre going to have a cumbersome outcome. Somebody said the ideal is made up of three people, two of whom are absent. I agree with you, structure is policy. So what we are doing is putting together flowcharts that allow Contracting Officers to pick the simplest route to get to placing a contract. And delivering materials or services. That means you need to understand what youre buying and how to tailor the process. And thats what we have our contracting people doing right now, using real life examples of how weve done this. So thats what i will bring you, what that flowchart is. I really appreciate that. And do i understand think i heard heain one of your testimos youre making an effort to keep people in these positions at least three milestones. One of the preps weve identified is acquisitions people come and going and it creates a herky jerky process. We are trying to be much more thoughtful about Critical Program junctures. I think were all committed to do that. I will say that we all spend a lot of time in one anothers offices and i know i meet with the Service Acquisition executives on a weekly basis. I hope that were committed to doing this. This is a sort of technical government organization, but i hope you can really focus on this issue of how long people stay in pay particular office because if they keep turning over, thats been identified in prior hearings as a significant problem. We are committed. The other piece is off the shelf technology. Mr. Guertz i kmipd commend to y p8. It an off the shelf boeing 737 with trofrpelectronics inside. Somebody should be commended for not havlg to invent a new airplane. At that factory, boeing produces one 737 a day which is an amazing technological feat in my mind, but the p8 seems to me as an example of how we do this without redesigning everything from the ground up. Are you familiar with that program . Yes, senator. Im getting more familiar in the job here. My background as a special ops guy is leverage whatevers there and put it to use as quickly as possible. Think back to this idea that we will have to build new, that will take some time. Well have to fight with what we have tonight. A lot of what we can do in the interim is leverage what we have in new and creative words, leverage whats in the special market in new and creative ways. Leverage what each of us is doing in the services so the navy is leveraging the air forces work so we dont have to reinvent a whole new cruise missile. This focus on every dollar counts, every day counts, were in a war tonight and we need to think that way in everything were doing, whether thats organizational design, acquisitional requirements, all of that has to play together. Think as youre seeing here, were committed to doing that for the nation. I have seen that today and its reassuring. Two quick points. You dont need to respond, but reducing lead times is almost as important as price. We cant maintain our qualitative edge if it just takes too long to get the weapon into the field. And finally, to reiterate what everybody has said today, we want to be partners. And to the extent you can tell us what could be changed in terms of regular regulation, in terms of congressional requirements, please do so. Everyone at this desk is committed to helping you to succeed. When you succeed, our country succeeds. Thank you so much for all the work youre doing. Mr. Chairman, i have to respond to a rhetorical question i raised about the importance of maine. It is important because its sent us some of the most impressive senators in our history. And for the record, please note that. Thank you. Senator mccaskill. I would like to take a moment personally to thank my fellow, my military fellow, Lieutenant Colonel shawn faster. Hes an army jag officer. He has been incredibly helpful to my office. Im very appreciative to the military for providing us fellows. Shawn was particularly terrific. He is leaving to go to the Army Legislative Liaison Office so all of us will get to know him better, but i wanted to briefly recognize his great work in my office over the last two years. Im going to miss shawn a lot. How many of you have read the november 2017 d. O. D. Top ten management challenges issued in november . Everybody read it . No. No, maam. Who has read it . I glanced over it. I must admit, it was in my read ahead package. Yes, maam, i read it yesterday. Okay. Secretary esper, have you read it . No, maam. How about you, secretary wilson . No. Im going to ask this question almost every time any of you come up here, im going to ask if youve read i. G. Reports. Nothing is more irritating to me than when the really hard from of gao and i. G. S identify problems and no one consumes the product. Its really important i think that all of you consume this product because they identified ten challenges of management. Thats what your jobs are, is management. Im going to focus on a couple of those today, but i certainly would advise all of you to take this report seriously. Sustainment problems. The market leveraging for spare parts. They identify in this report that for the h60 helicopter used by the services and socomthat they have purchased 2. 9 million spare parts for the h60, d. O. D. Has, using 2,000 separate contracts. Awarded to 590 different contractors over a 12month period. For almost 400 million. And often these parts were purchased for different prices, the same part. This is, you know, the kind of stuff that just makes you want to tear your hair out as somebody who is a former auditor. What roadblocks can you identify, secretary lord, that would keep you from fixing something ridiculous like that . I mean, 2,000 separate contracts to 590 different contractors for spare parts for the same helicopter. Since ago, ive been doi n doing a lot of data dives to understand the acquisition work in the workforce and this is the kind of thing i keep coming across. What i find are a couple of trends relative to sustainment. Early on in programs, people arent thinking about designing for sustainability. Theyre not thinking about setting up the right contract vehicles. Its often rather reactionary for different parts. So as we develop these systems we need a wholistic contracting strategy because contracting is a strategy entirely. I think you guys should when something comes online you should begin the process of identifying a handful of contractors, because you want the consistency and if somebody falls off youve got others. To get the best deal and leverage the best deal for that helicopter, i mean, i cant tell you how many times ive said in this committee and pointed out inefficiencies between the services for things that theyre all using. Thats where atnl comes into play. We talk about delegating programs back. Thats absolutely what we want to do. Where atnl can be very helpful and a s moving forward is looking for similar programs that leverage the same bill of materials and do the times of buys youre talking about. Im going to i dont have much time left. Im going to for the record ask you about reporting contractor past performance. Its another really irritating thing for me. We have bad contractors and we keep doing business with them with no consequence whatsoever. We never remove them from the list. I last thing i really want to touch on is supply Chain Management risks. In this report i was concerned about the identified risk of an adversary infiltrating the supply chain and sabotaging, maliciously introducing unwanted function or otherwise compromising the design or integrity. They specifically point out 9 Missile Defense agency as it relates to groundbased midcourse system. Thats obviously of grave concern. Im out of time, but what i would like for each one of you to do is to speak to me especially secretary lord, what are you doing to secure the supply chain in terms of the integrity being compromised . I dont need to explain to any of you what the dire consequences of that could be in todays world . I would be happy to do that. In fact, i just had an Early Morning meeting with general ashley in d. I. A. About that very topic this morning. I want to ask about all ten management areas, but the next time you come check and see if an i. G. Report or g. I. O. Report has been issued in the last 30 days because i will be asking you about this. Senator mccain, you wont believe this, but when i was with secretary wilson at the air force base in missouri, which was terrific that she visited, she told me she was trying to hire trainers for the joint Strike Fighter and she sent over they sent over somebody to get approved for hiring at opm and guess what opm told them . They didnt have enough experience flying the joint Strike Fighter. So obviously the job requirements imposed on you by opm sometimes are ridiculous, beyond the pale. Clearly nobody knew nobody had dploen t flown the joint Strike Fighter yet. Has that been resolved . Thank you for your help on that one. We can continue to use the help. Did you get it approved finally . That particular one has been approved but my average time to hire a civilian is about 180 days. Totally ridiculous. Thank you, mr. Chairman. [ inaudible ] senator, we have a task force looking at all of the requirements to hire people. How we can streamline those, both regulatory and legislative fixes so that we can get good people on board. I went to apologize to senator blumenthal because obviously there is an event on the floor of the senate which i know hes very interested in. And so if i may, mr. Chairman, ill submit my questions for the record and i hope well get prompt responses, focussing on the, among other issues, the huey replacement parameter. Thank you, mr. Chairman. I thank the witnesses. This has been very helpful. And, again, i hope the message is from this committee to you is that we want to work with you. We also have our responsibilities and we will try to carry those out as well. So i think this hearing has been very helpful, including a recent one we just had, and i thank the businesses for their willingness to help. And this crowded hearing will adjourn. Whats that . Oh, good. Well, thanks, heather. So i think one of the real strengths in socom is they really connect